On March 26, 2008 Ratan Tata created a new history by taking over of Luxury car brands ‘Jaguar’ and ‘Land Rover’ of British Ford Motors Co. It became a talk of the automobile world. For nine months the hide and seek game between Ford Motors and Tata Group continued as the curious world watched. There were other big players also in the fray to add spice to the game. But yet again Tata Group under Ratan Tata emerged victorious. For this buy Ratan Tata had offered an amount of 2-3 billion US dollars. By this deal Ratan Tata silenced those detractors who were saying that Tatas were only cheap car people. None could imagine that the world’s cheapest car Nano manufacturers could go for the luxury brands like Jaguar and Land Rover. The following are the salient features of this historic take over :
❑ Ratan Tata signed the take over deal on March 26, 2008. According to the deal Tata could continue to buy engines from the Ford.
❑ Tata Group would accept the responsibility of
$ 60 crores that stood in the pension account of the Ford Jaguar and Land Rover account.
❑ Ratan Tata expressed his happiness at aquiring Jaguar and Land Rover brands. He promised that the identity of the both models would be preserved.
❑ Ford would extend the technical cooperation to Tata Group in future and accessories and spare parts would be supplied to the new owners. There also would be cooperation in technical research, analysis and entrepreneur industrial information.
❑ After the take over Tata would be free to effect desired alteration in both the models without any drastic brand appearance change.
❑ The take over was welcomed by the Ford workers and Trade Union leaders termed it as a good news for British automobile industry and beneficial for the thousands of workers connected to those two models.
❑ The CEO and the President of the Ford Company said after signing the deal that under the ownership of Tata Group the two grand models would get technologically upgraded and become more popular. Ford would extend the needed cooperation.
Gain to Ford company
Both the great models were incurring heavy expenditures and few new consumers were showing interest in them. Ford company was suffering heavy losses. In the years 2006 and 2007 it had lost $600,000,000 and $ 2,700,000,000 respectively.
Gain to Tata Motors
❑ It will make Tata Motors a big name in the world automobile industry. The spin off gains will be considerable.
❑ After gaining an identity in truck manufacture Tata Motors would earn a great prestige as luxury car manufacturer of exclusive class.
❑ After Corus Steel take over Tata’s steel output has increased greatly which will be used in car manufacture to reduce the cost of the product.
No immediate gains for Indian consumer
Tata take over of Luxury brand Jaguar and Land Rover does not make immediate difference to Indian buyer. In the international market they are priced at Rs. 50 lacs. To an Indian buyer it will be a one crore rupee buy with equal amount going in custom duty. The situation may change when the production of these two luxury brands starts in India.
One more take over
In the year 2008 Tata Chemicals took over the U.S. chemical manufacturing outfit ‘General Chemicals’ in $1,010,000,000. It was also a big deal struck in January, 2008.
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